Algorithmic trading, what if it is just an illusion?
We experimentally investigate whether and how the potential presence of algorithmic trading (AT) in human-only asset markets can influence humans’ price forecasts, trading activities and price dynamics. Two trading strategies commonly employed by high-frequency traders, spoofing (SP) – associated with market manipulation – and market making (MM) – seen as liquidity provision – are considered.
An episode of the Finance d’Entreprise et Finance de Marché podcast, hosted by FNEGE MEDIAS, titled "Algorithmic trading, what if it is just an illusion?" was published on February 25, 2025 and runs 4 minutes.
February 25, 2025 ·4m · Finance d’Entreprise et Finance de Marché
Summary
We experimentally investigate whether and how the potential presence of algorithmic trading (AT) in human-only asset markets can influence humans’ price forecasts, trading activities and price dynamics. Two trading strategies commonly employed by high-frequency traders, spoofing (SP) – associated with market manipulation – and market making (MM) – seen as liquidity provision – are considered.
Episode Description
We experimentally investigate whether and how the potential presence of algorithmic trading (AT) in human-only asset markets can influence humans’ price forecasts, trading activities and price dynamics. Two trading strategies commonly employed by high-frequency traders, spoofing (SP) – associated with market manipulation – and market making (MM) – seen as liquidity provision – are considered.